I just finished reading a heated debate on a blog surrounding the pro’s and cons, comparison shopping and pitfalls of solar lease products. I’d say there was more anger and speculation, than definitive answers. And while speculation is great, as it leads to a distillation of reasoning, it nevertheless lacked critical thinking on how to resolve the debate. That is, “how are we going to argue about the pros and cons of solar leases?

Although this blog debate was great for getting varied perspectives from many, I left feeling more confused than ever, but even more determined on how to “critically debate” the solar lease issue.

What seemed to be missing from the debate were the opinions of impartial EXPERTS! That is, Energy Consultants who do nothing but scrutinize energy production and finance schemes; it’s their job! Yet, I could not detect a single commentary by an identified expert energy consultant or a certified accountant, except for one lone banker, who seemed to be the ONLY outside voice of reason in taking a subjective look at the debate from a macro view called simple accounting finance. Still, not a peep about cash-flow, internal rate of return, return on investment, or payback had been spoken. Folks, let’s settle this. It’s not rocket science; it’ called “math”. Is there third party verifier in the house?

Questions I’d Ask The Solar PV Universe About Vetting True Value:

Cash:

Can you make more with your money in an investment of any kind? Albeit, some people may see solar PV as in investment if it saves money off the monthly utility bill, but at what percent? For example, what if you have an astute investment advisor who can make your money 5%, 6%, 7% or more in a well managed investment? I have a friend who is a bond fund manager and he’s making his clients 15% to 20% in his investment vehicles.

Are you prepared to part with the lost opportunity of your cold hard cash to use for other things, including emergency living reserves? What is holding on to your cash reserves “intrinsically” worth to you?

However, cash may be the cheapest way to go when one considers that a “no money down” solar lease will cost money. But how do you estimate this? For example, what is the actual percentage a consumer is paying to lease the solar panels calculated over the lifetime of the lease? Is it 7%, 8%, 9%? Ask your accountant or an energy consultant to calculate the scenarios over the lifetime of the lease.

Lease:

A “pre-paid” lease will cost money as well, like a down payment on any durable good, but it will cost LESS, (percentage) than a no money down lease? As an aside, this is why auto leases, home leases, or any type of lease instrument is widely popular; people cannot afford to, or choose not to pay cash. It’s here, I’d like to think we’re all adult enough to understand that we live in a free market. As consumers, we will pay what the market asks until our behavior changes the current trend.

Conventional Loan or Balloon:

No matter from which lender you borrow the money, you’ll be on the hook to pay an interest rate and agree to a set of terms and conditions tied to that loan instrument. Additionally, you’ll have debt financing tied to your name, which may hinder your ability to make other investments that are of higher priority, now or later. So what interest rate can you obtain? Is the rate lower than what your solar equipment will save you on your monthly utility bill, including eventually owning the equipment to produce free energy once it’s paid off? Or, is the interest rate MORE than what you’ll save on your utility bill and what free energy you’ll produce after you pay for the equipment? What if you run into problems down the road, and you simply can’t pay for the solar loan? Do you have the credit score and the documented income to qualify for a loan?

PACE Program:

“Property Assessed Clean Energy” . Where available, this is a great way to finance a solar investment, with no documented income. But there’s no free lunch here either, as the average percentage to finance through a PACE-like program is 7%. And really, this is okay when you stop to think about it. I mean, do we really expect to get 0% financing on ANY of these funding schemes?

Your Personal Values:

When purchasing solar equipment, the good news is that it’s not MANDATORY; it’s FREE WILL. So until the market volunteers to lower prices through consumer behavior, research and development and perpetuated government subsidies, it looks as if we are all working of our own volition to buy, or cry, or stay with our current utility provider.

Energy Consultants and Accountants:

“An ounce of prevention is worth a pound of cure”. Avoid solar lease pitfalls. Smart buyers always get their major investments third party verified by an objective professional. Why anyone would go with what ONE equipment supplier or leasing company recommends; this kind of trust indicates a BIG red flag to the indifference of good old fashioned due diligence.